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Expat Investor : July August 2008
Skipton Guernsey Limited (SGL) is a wholly owned subsidiary of Skipton Building Society. Deposits made with SGL are not covered by the Financial Services Compensation Scheme established under the UK Financial Services and Markets Act 2000. Skipton Building Society, established since 1853, has given an undertaking agreeing to discharge the liabilities of SGL in so far as SGL is unable to discharge them out of it own assets and whilst SGL remains a subsidiary of Skipton Building Society. SGL is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 1994, as amended and conducts business only in Guernsey, it is not authorised to accept deposits elsewhere. Copies of the latest audited accounts are available on request. *AER stands for Annual Equivalent Rate and illustrates what the rate would be if interest was paid and added each year. • 6.00% gross p.a./AER on balances between £10,000 and £99,999 • 90 days' notice for withdrawals • Minimum opening balance £10,000 • Prompt notification of interest rate changes • Variable rates For full details of this account and other Notice and Access accounts call: 01481 727374 visit: www.skipton guernsey .com/gn Outlook bright with rates upto INVEST IN THIS EXCLUSIVE HIGH INTEREST STERLING ACCOUNT % 6.2 5 STERLING ISLAND NINETY On balances of £ 100,000 or more gross p.a. / A E R * July/August 2008 ? EXPAT INVESTOR 13 INVESTMENT NEWS Fast Facts 66182 Fast Facts 66181 Fast Facts 66007 of many constituent funds. To qualify for inclusion in the IMA’s Cautious Managed sector, funds can hold up to 60% of their assets in equities. The IMA’s Balanced Managed sector allows compounded by a concentration on the UK. “Considering the dominance of equities and the UK focus, it is fair to say that many such funds could hardly be described as Cautious or Many top selling IMA Cautious Managed and Balanced Managed funds do not adequately describe their true risk profiles and their names may be misleading to investors, HSBC Investments warns. Dan Rudd, Head of External Distribution at HSBC Investments, says the Cautious and Balanced labels attached to many managed funds would imply these were highly diversified and therefore relatively low risk. However, Mr Rudd says this is not the case, and most funds carrying these labels tend to be concentrated into UK equities and corporate bonds. Mr Rudd stresses that while the IMA guidelines for funds in the Balanced Managed and Cautious Managed sectors provide the opportunity for a strong balance of asset classes and international regions, this latitude appears not to be reflected in the asset allocations flows were positive, with investors buying a mixture of cautious and growth investments, but the focus very much shifted to cash investments in the latter half of the year. Despite this Gartmore China Opportunities fund was the third most popular fund purchased through the Barclays Stockbrokers Funds Market in 2007. Investors were more cautious in their 2007 investment decisions compared to those made in 2006; with the cautious sectors dominating. In 2006, the specialist and global emerging market sectors were the most popular with investors but this has been replaced with a focus on Money Market and UK Equity Income Funds in 2007. Yet the Asia Pacific (excluding Japan) sector showed unparalleled growth in 2007 moving from sixth in 2006 to second place in 2007. In terms of individual funds, the specialist sectors ranked high, with JP Morgan Natural Resources and Blackrock Merrill Lynch Gold & General ranking fourth and fifth respectively by assets invested. Amy Nauiokas, Head of Barclays Stockbrokers says, “The dominance of the Money Market and Equity Income sectors reflects the cautious nature of our clients in 2007. But there are some investors who continue to find opportunities in more diverse markets, with the Asia-Pacific, Specialist and Emerging Markets sectors remaining popular.” Managed funds not adequately diversified, claims HSBC Investments Balanced – though many are happy to call themselves this.” He argues that to be truly Cautious or Balanced, it is necessary for these funds to hold a much wider mix of assets than just equities and bonds, and to take a global approach to investment. A fund which diversified into property, hedge funds, private equity and commodities would by its very nature provide broader geographic exposure. Overall, this would provide a better balance between risk and return for the long-term investor. up to 85% equity exposure within the portfolio. Mr Rudd says rather than opting for a diversified balance of asset classes, many funds invest near the maximum permitted levels in equities. This risk is then further
May June 2008